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Foxconn mulls Vietnam move for iPhone production to avoid effects of U.S. tariffs

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Apple assembly partner Foxconn is reportedly considering the possibility of setting up a new facility in Vietnam, a move that could potentially prevent the iPhone from being hit by tariffs created by the Trump administration in its ongoing trade war with China.

Head of the Vietnam Chamber of Commerce and Industry Vu Tien Loc is said to have raised the possibility with Prime Minister Nguyen Xuan Phuc of opening a Foxconn factory in Vietnam specifically for iPhone production, according to Reuters citing a Vietnam Investment Review report from Monday.

Loc confirmed talks were underway, advising “We are discussing the possibility of this with Foxconn.” The company itself advised it does not comment on matters “related to current or potential customers, or any of their products.”

In a note to investors seen by AppleInsider, Morgan Stanley’s Katy Huberty suggested that a finishing plant, one with a single-step in the assembly or one intended for final packaging, would not skirt tariffs.

“It is our interpretation that Apple would have to do more than just one stage of final assembly outside China for the origin of the good to shift away from China,” wrote Huberty. “[This] would then likely require billions of dollars of investment from Apple and partners over a multi-year period, making this a more disruptive scenario.”

A number of Foxconn executives spoke to Reuters in the last week about where production could be moved through, if the company needed to mitigate the effects of the U.S.-China trade war. Vietnam and Thailand were seen as the preferred locations to set up operations, though a lack of skilled labor and inadequate infrastructure would be an issue in either case if such a move was made.

The fresh examination of new bases of operation for Foxconn follow after an interview with President Donald Trump in late November, where he signaled an intention to move ahead with tariffs on $200 billion of goods imported from China, if discussions with Chinese President Xi Jinping failed to bear fruit.

The administration has frozen another round of tariffs, pending further discussion and negotiation, that would apply to all remaining goods not already on the import list, bringing iPhones under the same levy. A levy of 10 percent could be applied to iPhones if it does proceed, which analysts suggest could raise the cost of an iPhone by between $60 and $160, if it is passed on to consumers instead of being taken out of Apple’s profits on the sale.

Shifting production to another country has the potential to avoid the tariff, but rules require the product to be substantially transformed for it to be counted as produced elsewhere, so shipping almost-completed goods from China to Vietnam for final finishing touches isn’t enough of a change. Add that China is one of the few countries capable of offering a large and low-cost labor force in a single location, and moving production to a new country becomes a potentially expensive and futile endeavor.

According to a report on Appleinsider

Chinese investors made 922 deals in capital contribution or share acquisition of Vietnamese firms

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Indirect investment from China to Vietnam is surging sharply, causing concerns as Chinese companies could use the local peers as intermediaries to avoid tariffs imposed by the US.

Reports from the Ministry of Planning and Investment’s Foreign Investment Agency showed that Chinese investors made 922 deals worth US$500 million in capital contribution or share acquisition of Vietnamese firms in the first eleven months of 2018. HanoiTimes reports.

Besides China, indirect investment inflow of Hong Kong and Taiwanese investors to Vietnam also poured sharply in the period, with 105 deals worth US$220 million of Hong Kong investors and 460 deals worth more than US$365 million of Taiwanese investors.

Related topic: Company formation in Vietnam

As the US-China trade war is accelerating with the US imposing high tariffs on many Chinese products, experts said that the government and domestic firms must take actions against Chinese firms, which ship their unfinished products to Vietnam and then export them to the US through a Vietnam-based firm as an intermediary to avoid tariffs.

“Vietnam needs to be cautious with such investment projects, which are registered in Vietnam only to obtain legal Vietnamese status in a move to allow Chinese firms to avoid high taxes when exporting products to the US” said Nguyen Xuan Thanh from Fulbright Vietnam University.

If Vietnam cannot prevent the wave of Chinese goods that transit in Vietnam before going to the US, it may bear punishments imposed by the US as the case of steel originated in China but exported from Vietnam. The US Department of Commerce had decided to slap tariffs on steel produced in Vietnam using Chinese-origin materials.

Bui Quang Tin, CEO of BizLight Business School, said Vietnam was the only market among the US’s five trade partners with which it had a high trade deficit but had not imposed tariffs yet. But that could still happen, he warned, adding if the US imposed punitive tariffs, the impact on the Vietnamese economy would be huge.

According to a HSBC’s recent survey, Vietnamese firms also foresee the situation, HSBC Vietnam’s CEO Pham Hong Hai said, adding while the firms have kept calm about challenges to be brought by FTAs, they now have a big worry about transshipment goods from China, which may result in high taxation on Vietnamese goods as well.

If some Vietnamese firms lend a hand to Chinese to avoid tax, entire industries and the national economy will suffer, Hai said.

Goods origin under strict control

To avoid the risks, experts said that authorities should closely monitor the import and export of goods for origin to prevent customs declaration fraud.

Besides, Pham Sy Thanh, director of the Chinese Studies Program, said third countries like Vietnam need to prepare well to prove the Vietnamese origin of the products.

Sharing the same view, Hai from HSBC said that with high risky industries, both firms (through associations) and the government should actively prepare transparent information on origin to readily show out before being taxed.

In particular, according to Hai, enterprises must actively access information, even update it daily to come up with solutions. Of course, there is no perfect solution because everything changes constantly, but the more the firms know how to have access to information and focus on competitive advantages, the more they can take opportunities.

The information needs to be shared widely among the business community, especially with small companies, Hai said.

Meanwhile, Tran Du Lich, deputy chair of the Vietnam International Arbitration Center (VIAC), said that state management agencies should create criteria and standards on goods origin.

In the long term, Lich believes that the best solution is to develop local supporting industries that will help increase the locally-made content in products.

CIMB Bank unveiled its first Digital Lounge in Vietnam

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CIMB Bank also launched its Octo by CIMB mobile banking app for consumers in Vietnam.

Saigon (Ho Chi Minh City) to host CIMB Bank Vietnam’s first branch presence following the establishment of its headquarters in Hanoi in 2016. The launch also marks the beginning of CIMB Vietnam’s digital banking proposition, inaugurated by Octo which offers fast, secure and convenient 24/7 mobile banking services.

Tengku Datuk Seri Zafrul Aziz. The CIMB Group CEO said the launch of its inaugural lounge and Octo in Vietnam not only demonstrates its long term commitment to the Vietnamese market but also its ambition to continue contributing to the growth and development of Asean.

“As one of the region’s fastest growing markets, with macroeconomic stability, a strong entrepreneurial culture, and a high proportion of young mobile-centric population, Vietnam is well-poised to contribute significantly to Asean’s economic development. With CIMB’s strong Asean network, in-house financial expertise and accomplished partners, we are confident that we have entered Vietnam at the right time to start developing ecosystems that deliver, not just great banking products and services, but also other offerings that add real value to the CIMB customer experience.”

Avoiding effects of U.S. tariffs, Foxconn considering iPhone factory in Vietnam

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Apple assembly partner Foxconn is reportedly considering the possibility of setting up a new facility in Vietnam, a move that could potentially prevent the iPhone from being hit by tariffs created by the Trump administration in its ongoing trade war with China.

Foxconn considering iPhone factory in Vietnam as China trade war uncertainty continues

Korean men prefer Vietnamese women over women of other countries

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“A lot of Korean men marry Vietnamese women because they prefer them over women of other countries,” said Rep. Lee Hae-chan, chairman of the ruling Democratic Party of Korea during his meeting with a high-level Vietnamese delegation Monday.

Lee was quoted as saying when he met the delegation led by Deputy Prime Minister Trinh Dinh Dung at his office. The remarks were enough to be interpreted as objectifying women in general, condescending to Vietnamese women, most of whom marry Korean men through international brokers, and, perhaps worse, ranking migrant brides by Korean men’s preference.

According to a report by Oh Young-jin on KoreaTimes, Lee didn’t apologize and there were no reports that the Vietnamese delegates protested.

However, the remarks triggered an outcry from other parties.

“Lee tried to divide some 300,000 biracial households in Korea by race and nation of origin,” the Party for Democracy and Peace said through its spokesman. “We deplore the ruling party’s leader for having such a narrow and distorted view about our diverse families.”

The conservative Bareunmirae Party said, “We demand Lee officially apologize.”

The progressive Justice Party said,” Many Vietnamese brides come to Korea in their early 20s, not even knowing how to speak Korean, and get pregnant, being separated from their families.

“Despite their effort to sustain themselves with a sense of duty to their children, much of Korean society looks down on them,” the party said. “Lee exposed that insensitivity when he said what he thought were pleasantries during his meeting with the Vietnamese delegation.

Co-working spaces becoming increasingly popular

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With high office rent in Vietnam, especially compared with other ASEAN countries, co-working spaces have become increasingly popular.

Aleph Labs has become one of the first clients of WeWork, the US-based startup, with a total value of $20 billion in 2017. It officially entered the Vietnamese market last week.

Uyen Nguyen, CEO of Alepth Labs, a software firm with 400 workers present in seven Asian cities, said she decided to move from A-class office to WeWork because of the visual uniformity. Most workers at Alepth Labs are young who need a creative and highly interactive environment.

WeWork’s first co-working space, set at E-Town Central Building in district 4, will be open in December, while two more spaces expected to come out in HCMC and Hanoi in 2019.

While the customers of WeWork’s rivals are mostly startups and freelancers, the customers of WeWork are large-scale firms with 45 percent of firms having more than 1,000 workers.

According to Turochas Fuad, CEO of WeWork ASEAN, the rental in Vietnam is second highest in ASEAN, just below Singapore, which shows that it is a market with great potential and demand.

After three years of operation, Toong established a network with 10 co-working spaces in Hanoi and HCMC (Vietnam), Vientiane (Laos) and Phnom Penh (Cambodia).

Pham Thuy Linh, marketing & branding director of Toong said the total floor area Toong would provide by the end of this year could reach 20,000 square meters.

Linh said though this is a new type of office, co-working spaces have been lauded by youth and technology firms, helping Toong connect a 3,500-member community of individuals and businesses, from startups, small & medium sized enterprises to large corporations.

Toong’s clients have 1-1,000 workers, operating in 36 business fields, from finance, healthcare, education, tourism and NGOs.

Turochas Fuad said that young people are changing their working modes. They tend to work in large cities, and seek communities for connection and creativity . There are up to 60 million people in Vietnam below aged 35.

“Vietnam is one of the fastest growing economies in the world and in ASEAN. It is now the right time for us to exploit the market,” he said.

Tu Thi Hong An from Alpha King, which owns the Atlas brand, said the co-working market now has the biggest ever potential for development.

“Everything, from design, resources to functions of offices, will change completely in the coming years. If we pay attention to the factors promoting the needs and requirements of modern tenants, the opportunities will prove to be endless,” she said.

Mai Lan report on VNN

Central bank’s exchange rate hits highest level in months

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The central bank’s daily reference exchange rate of the US dollar against the Vietnamese dong has been adjusted up slightly in recent sessions, pushing it to the highest level since early this year.

On Monday, the central bank appreciated the value of the dollar against the dong by VND5 over last Friday to VND22,755 per dollar, the highest rate since January 2018.

On Tuesday, the central bank kept the rate unchanged. With the current trading band of +/- 3 per cent, the ceiling rate applied by commercial banks for Tuesday is VND23,437 per dollar and the floor rate is VND22,073 per dollar.

At commercial banks, the price of the dollar saw decreases on Tuesday. Vietcombank posted VND23,260-23,350 per dollar for its buying and selling rates, down by VND15 from Monday.

At BIDV, the buying and selling rates were VND23,255-23,345 per dollar, down by VND45.

Techcombank cut the buying rate from the previous day by VND10 and the selling rate by VND15 to VND23,240 and 23,390 per dollar, respectively.

Compared with January 2018, the central bank’s daily reference exchange rate of the US dollar against the dong increased by 1.56 per cent, or VND350.

According to experts, the central bank has decided to raise the reference exchange rate gradually to prepare for the fourth interest rate hike of the US Federal Reserve (Fed) this year, which is expected in December.

The adjustment aims to make the dollar appreciate gradually against the dong instead of surging strongly and suddenly when the Fed increases the rate, minimising adverse impacts on the local foreign exchange market, experts said.

To better manage the country’s foreign exchange market ahead of the Fed’s interest rate hike, the State Bank of Viet Nam has also recently introduced forward sales of US dollars to commercials banks for the first time this year.

The SBV held forward exchange sales on November 23 and 26 to banks with dollar demands. The forward rate of the sales, which have a due date of January 31 next year, is VND23,462 per dollar.

Source: VNA

Hà Nội’s residents suffer bad air

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Air quality in Hà Nội has become worse recently, with air quality index (AQI) measurements ranging from 78 to 178 according to the Environment Protection Centre of the city’s Natural Resources and Environment Department.

When the AQI, which measures daily air pollution, is in this range, the air quality is considered unhealthy and people may begin to experience some adverse health effects. Members of sensitive groups may experience more serious effects.

Monitoring results in the urban areas of Trung Yên, Kim Liên, Mỹ Đình, Tân Mai and Tây Mỗ showed the AQI had been high.

The same situation was seen in Hoàn Kiếm and Ba Đình districts.

Bad air quality was recorded at monitoring points near major roads, especially on Minh Khai Street (part of National Route 32) and from Phạm Văn Đồng Street to Thăng Long Bridge.

The poor air quality in the two places was due to heavy traffic.

Mai Trọng Thái, director of the Environment Protection Centre, said the situation was due to the weather in the past week, in which cold and dry weather kept the air quality from improving.

The large temperature variation between day and night has kept exhaust fumes and dust from dispersing, trapping them in the air and leading to relatively high levels of pollution and poor AQI scores, said the centre.

Despite seeing some rain on Sunday morning, the air quality had not improved.

The AQI is a daily indicator of air quality. It tells you whether the air around you is clean or polluted and the effects it may have on your health.

Vietnamnews

New updates drive thousands to take TOEIC tests

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Thousands of young people in HCM City have lined up over the past few days in order to take the TOEIC test as fast as they can before new updates are implemented next year.

IIG Vietnam, the country representative of ETS announced in late October that the TOEIC listening and reading tests will be updated in Vietnam, beginning on February 15, 2019. The updates will include updated questions to reflect the changing use of English around the world. There will be no change in score scale, test difficulty, number of items or test length.

However, many people fear that the updated tests will be more difficult.

Since early November, many people have visited the IIG Vietnam building in HCM City to take TOEIC tests and the number of hopeful contestants peaked in the past two days. Many started queuing at 3 am and the crowd filled the stairs and the yard.

According to Duc, people racing to take the test now will only have six weeks for studying. Unless they are already good at English, they may not have good results. The new tests are more difficult and learners will need about one month to get themselves get used to the new format.

“It’s not necessary to line up and fight in the crowd since 4 am,” he said.

Le Phuong report on Dtinews

December 4: VN-Index up slightly

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Index gains just 0.11% in morning trade.

Vietnam’s stock market had a generally positive December 4. Bluechips VHM, VJC, VRE, BHN, VIC, VNM, MSN, and BVH as well as banking stocks BID, VPB, and TCB all rose and supported the market.

Increases also spread to other sectors such as securities and real estate and construction. In oil and gas, GAS, PVS, PVD, and PVB did well, following gains yesterday. VHC has rebounded recently and rose VND1,200 ($0.05) to VND100,200 ($4.31).

Sales pressure appeared after the opening minutes, stemming the momentum gained early on. Movements in Asian markets also affected investor psychology.

The VN-Index finished the morning up just 1.05 points (0.11 per cent) to 952.64 points, while HNX-Index lost 0.5 points (0.47 per cent) to 107.14 points and UPCoM-Index remained at 53.06 points.

Liquidity improved but was still low, with a matching order value of VND2.2 trillion ($94.7 million). Foreigners were net buyers by VND50 billion ($2.15 million), with a focus on VNM and VIC, net buying by VND37 billion ($1.5 million).

VIC lost 0.1 per cent in the morning, GAS 1 per cent, HPG 1.3 per cent, PLX 0.5 per cent, VCB 1 per cent, BID 0.5 per cent, and CTG 1.2 per cent.

The best gainers were VRE, by 2.1 per cent to VND32,000 ($1.37) VHM, by 1.8 per cent to VND79,100 ($3.4), MSN, by 1.2 per cent to VND83,200 ($3.57), and TCB, by 1.5 per cent to VND27,600 ($1.18).

My Van report on Vneconomictimes

Saigon finds solutions to encourage rubbish sorting

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The authorities in HCM City have suggested buying rubbish from local people to encourage rubbish sorting.

On November 2, the local authorities and HCM City Television co-operated on a TV show to promote greater awareness about the city’s environment.

Vuong Quy Lam, deputy head of District 8 Public Services Company, said 70 employees collected 30 tonnes of rubbish from the canals every day and up to 70 tonnes when Tet Holiday was near. Chairman of Ward 16 Le Minh Tan said littering into canals was still very common even though they had tried to raise public awareness and got local people to sign a non-littering commitment.

Former Chairman of HCM City People’s Council Pham Chanh Truc said the collecting and organising rubbish was not effective because they didn’t have waste treatment company that can recycle the rubbish. “What’s the point if all rubbish will be buried anyway?” he said. “HCM City doesn’t lack funds and could call for investment from the private sector so we definitely have to do this right.”

He went on to say that the authorities have to encourage rubbish sorting by giving awards to model citizens and buy the rubbish.

Phan Van Keo, a farmer in Hoc Mon District, suggested investing in more modern rubbish trucks and starting cleaning movements.

In 2016, a government resolution about administrative fines in the field of environment protection was issued, however, due to the size of the city and its population, the resolution will only go into effect in HCM City in late 2018. Tran Vinh Tuyen, vice chairman of HCM City, vowed to strictly punish anyone who littered the city and persuade locals to categorise rubbish. They will also help sanitary companies with more equipment.

Le Huy Ba, a lecturer at the Department of Environment, Resources and Climate Change at HCM City University of Food Industry said in order to make rubbish sorting work, HCM City authorities have to invest in the whole system from collecting, transporting and processing. They should instruct the locals on how to sort the rubbish, tighten control over rubbish collecting process before applying fines on anyone.

According to Ba, many problems will arise if the authorities buy rubbish from the locals. He suggested exempting rubbish collecting fees if the households sort their rubbish well instead.

Source: Dtinews

Vietnam’s Vingroup to launch smartphones next week as part of strategy shift

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Vingroup, Vietnam’ biggest listed firm by market value, will launch its first smartphones on Dec. 14, as part of its transformation into a technology and industrial group.

Once a real estate and retail focused conglomerate, Vingroup said on Monday it will launch four models of smartphones under the brand name ‘Vsmart’. It became the country’s first full-fledged domestic car maker two months ago.

Vingroup will be seeking success for its smartphone foray in the nation of 95 million people where smaller rivals have failed to dent the popularity of Samsung and Apple phones. Vietnam is the largest smartphone production base for Samsung Electronics .

The Vsmart phones are being made in its factory in Vietnam’s northern city of Hai Phong, with a capacity to produce 5 million phones a year in the first stage, Vingroup said in a statement, adding that it now owns 51 percent of Spanish technology firm BQ and will utilise the Spanish experts for product development.

“We hope that Vsmart phones, alongside VinFast cars, will contribute to the development of Vietnam industry and bringing Vietnamese brands to the world,” said Nguyen Viet Quang, vice chairman and chief executive officer of Vingroup.

Vingroup said its Vsmart factory will also produce smart TVs and other smart products in the future.

Source: Reuter

AFF Cup: Vietnam victory not perfect, room for improvement

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After winning the first leg away against the Philippines, Vietnam’s football coach says ‘cannot stop now.’
Coach Park Hang-seo started the post match press conference saying the team needs to concentrate on the second leg to be played on December 6.

“I’m satisfied with the players. They have been working non-stop throughout the whole game and I want to thank them for that. But we cannot stop now, as we have to focus on the second leg in Hanoi,” Park said.

“In the halftime break, I told the players to look back at the previous games for more motivation. And they did play better. From my point of view, Phan Van Duc is the man of the match. He contributed in our style of play and had a goal for his own,” Park added.

The away victory gives Vietnam a bid advantage, because the second leg will be played at home with the support of 40,000 roaring fans.

However, Park Hang-seo saw room for improvement.

“This was not a perfect victory for us, because we conceded the first goal since the start of the tournament. We also missed many chances. That’s why we will have to do some analysis, improve our finishing skills and prepare for the second leg,” he said.

On the other side, the Philippines’s head coach Sven-Goran Eriksson said he was not surprised with the result.

“The Philippines met a very strong opponent today. Vietnam has a great defensive line and it’s really hard to get through. Of course I cannot be happy, but this result was expectable. We had a tactical problem today.” Eriksson said.

However, the famous coach stays positive on the upcoming game and believes Philippines can still defeat Vietnam on their home ground.

“We still have one game left. I believe we can beat them and proceed into the final. Today, we wanted to defeat Vietnam but couldn’t. In the second leg, we will come to Hanoi and play like we got nothing to lose,” he said.

On Thursday, December 6, Vietnam will face Philippines again, this time in My Dinh National Stadium in Hanoi.

Lam Thoa report on Vnexpress

Cashless services explode in Vietnam

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Vietnam’s central bank says the value of cashless transactions more than doubled over the first three quarters of 2018.
The Department of Payments at the State Bank of Vietnam reported a strong rise in payments over electronic channels between January and September, compared to the same period last year.

Accordingly, the value of online payments rose by 18.3 percent, while transactions over mobile apps and e-wallets rose by 126 percent and 161 percent respectively.

The number of transactions over Internet, mobile and e-wallet channels also rose 33 percent, 30 percent and 28 percent respectively.

“Mobile payment is becoming a new trend with the rise of technologies such as QR codes, contact and contactless payments, and the tokenization of card information,” said Nghiem Thanh Son, deputy director of the department.

The first months of 2018 saw the number of users and the value of transactions through electronic channels such as online, mobile and e-wallets rocket at many banks.

At Sacombank, statistics show that as of October, the number of registrations for online banking reached over 1.3 million accounts and for mobile banking 1.1 million accounts. The total value of transactions per month through both channels exceeded VND108 trillion ($4.63 billion).

For VietinBank, the country’s second largest lender by assets, the number of internet banking users in the first half of this year surged 114 percent over the same period last year to a total of 1.5 million accounts and VND44.26 trillion ($1.90 billion) in total transaction value.

Its mobile banking users also reached 1.5 million, engaging in transactions totalling VND64.35 trillion ($2.76 billion) between January and June.

Over 7 million people are using digital services provided by MBBank. The average transaction value per month reached VND27.4 trillion ($1.17 billion), with digital transactions making up approximately 2.6 million out of 3 million total monthly transactions seen at this bank.

Nguyen Hoang Minh, deputy director of the State Bank’s HCMC branch, noted that the number of online banking customers has seen average annual increase of 20 percent in recent years.

Minh said that in order to continue developing non-cash payment channels, credit institutions should pay attention to linking their cashless systems with the public sector, specifically in areas like health, education, payroll and utilities.

Cashless services should also expand to include online payment options for public services like buses, trains and other smart urban solutions, he said.

Vien Thong report on Vnexpress

Second nose wheel of Vietjet plane found

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The second nose wheel from the Vietjet plane which had a landing problem at Buon Ma Thuot Airport was found on December 2.

The second nose wheel was found inside the airport’s grounds. The case was classified as a B-class aviation accident. An Airbus representative arrived in Buon Ma Thuot on December 2 to investigate the case. The plane was only transferred to Vietjet and put into operation on November 15.

“We’ve gathered information and started working with related agencies to investigate the black box,” said the representative of the Civil Aviation Authority of Vietnam.

The flight crew were suspended during the investigation and their pilot licenses were withdrawn. The CAAV praised the crew’s reaction to the situation and rapid evacuation of 207 passengers.

On November 29, the Vietjet plane encountered a landing problem while touching down Buon Ma Thuot Airport as both of the nose wheels separated from the gear. They managed to land safely, however, six passengers suffered from light injuries.

One of the nose wheels was found on November 30. According to the pilots, the plane and weather were fine when they landed. It is thought that the accident may be caused by human error.

Source: Dtinews